10 Places for Seniors to Retire and Pay Way Less in Taxes
One of the biggest issues for retirees is taxes, especially when it comes to keeping as much money as possible for yourself and not handing it all over to Uncle Sam. Is there really a tax haven where you can enjoy your retirement and keep the grabbing hands of the government away from your retirement money? Luckily, we’ve compiled a list of places where you can retire and enjoy a luxurious life while still maintaining your lifestyle in your golden years–even if you’re living off of a pension, Social Security, or your own retirement savings.
We will first start off our list with the best places in the United States, and then travel abroad where the tax benefits and retirement lifestyle are also excellent. Here’s 10 places to retire and pay less in taxes.
Alaska is ideal for anyone who likes outdoor recreation. You will have to adjust to the climate, since it gets quite cold and spring takes longer to warm up. The state of Alaska is a playground for adventurers with miles of territory perfect for hiking, hunting, boating, and more. As it’s a popular haven for retirees, the state has an abundance of things to do. Your retirement will go far here because Alaska has no income or sales taxes, plus your Social Security and pension aren’t subject to tax. Once you’ve been established as a permanent resident, you’re eligible to receive a yearly dividend check from the state for its vast oil production.
Long considered one of the premiere places to retire, Florida is a smart choice if you’re concerned about taxes. Florida doesn’t have a state income tax, which helps you save in taxes, and also features just a 6% sale tax. Income from Social Security or pensions is exempt from taxes. The weather is enjoyable and if you love warm spots, it may be the place for you. Florida has plenty to offer for retirees including golf courses, sunny beaches and more. The one trade-off is the chance of inclement weather in the form of tropical depressions or hurricanes, so be aware of this.
While you’re considering warm climates down South, take a look at Mississippi. Like Florida, the state doesn’t take Social Security or pension incomes, however, they also don’t tax annual retirement income or for withdrawals from your retirement account. The weather is pleasant, and the scenery is tranquil, offering you the relaxation you’ve always wanted.
4. Costa Rica
If you’re considering retiring outside the U.S, you have plenty of options, but Costa Rica is going to be one of your best. The low cost of living draws many to Costa Rica, however, it’s ideal for retirees. If you leave your money in the States, you won’t be taxed on it, only on income earned while in Costa Rica. Other countries have strict rules about foreigners purchasing property, however, it’s easy for an American to purchase Costa Rican property. What’s even better are the notoriously low housing taxes: just 0.25% of the appraised value.
Panama is another Central America paradise for retirees. There’s several established expat communities in the country and your money will go far thanks to the low cost of living, plus no taxes on retirement income. Panama readily welcomes retirees and offers benefits to them, including reduced airfare, bus fare, and discounted entertainment. The country offers high-class healthcare for a fraction of the cost in the U.S. If you pick up employment while in Panama, you’ll pay 30% of your wages in taxes, however the country’s sales tax is low compared to other locations at just 7%.
A low cost of living is one benefit to the Philippines, and it’s no wonder that it’s home to thousands of expats. The country is home to splendid beaches and gorgeous landscapes, making it feel like a little piece of heaven. Your retirement income isn’t taxed at all, however, you should expect to pay higher sales taxes compared to other places on our list at 12%. Buying property is a draw though because those taxes are just 1% to 2% with capital gains taxes at 6%.
Don’t write off retiring in an Asian country, as places like Malaysia have plenty to offer American retirees. Malaysia was voted as one of the best places to retire by International Living Magazine and is known for its rich culture. The area draws diverse groups, and you can enjoy the splendor of lush surroundings plus the excitement of a bustling metropolis depending on where you live. The climate is suitable for those who love it warm as the area boasts an average temperature of 80. Your retirement income will go far as it won’t be taxed, and the cost of living is quite low. The national sales tax is just 5% as are property taxes.
Add Uruguay to the list of places to go. The benefits of this Latin American country as numerous, including a low cost of living, high literacy rate, and no retirement income tax. If you are employed, you’ll expect to pay 30% of your income, but the retirement options are plentiful even with a low pension of $500 a month. The infrastructure is first-rate in Uruguay, the people are enjoyable and the beaches are beautiful.
Thailand is a great place for retirees because as long as you have your money in a bank outside the country, you won’t pay tax on the funds. Once you bring the money in Thailand, you’ll pay 37% in remittance taxes. The sales tax, however, is low in Thailand at just 7%. If you decide to buy a property, you’ll only pay on it if you rent it out. The weather is just one reason to move Thailand thanks to a balmy tropical climate year-round, but the culture, sights, and scenery are great as well.
The last, but certainly not the least, Latin Country on our list is Ecuador. There’s a tax on worldwide income that can run up to 35%, however, retirement income isn’t taxed. You’ll also pay low taxes on property — just .25% to .5% percent. Capital gains are only taxed as regular income, and there’s a 12% sales taxes, so things even out nicely. The appeal of the country is numerous, with three varied options according to your lifestyle. You have the mountains, cities, beaches, and jungles right within reach, and you can truly be in the lap of luxury.